State drops most of its demands in union contract

State workers who are AFSCME members will get a total of 15.2 percent in salary increases over the next four years under a tentative contract settlement.

Doug Finke

State workers who are AFSCME members will get a total of 15.2 percent in salary increases over the next four years under a tentative contract settlement.

The American Federation of State, County and Municipal employees will pay more for their health insurance, but the increases are substantially less that those initially sought by the Blagojevich administration.

At the same time, people who retired with more than 20 years on the job will continue to get health coverage at no cost, and workers will not be required to pay more toward their state pensions.

The details are in a memo produced by AFSCME that is being distributed to union employees at ratification meetings around the state. A copy of the memo was obtained by GateHouse News Service.

“It’s not a contract, it’s a tentative agreement between the state and the union,” Lindall said in an e-mailed statement. “Until the agreement is ratified, it is not final. Thus, we believe AFSCME members have the right to review the provisions of the agreement confidentially and without interference.”

The union has already begun ratification meetings. Lindall said they are expected to conclude Wednesday. The results of the ratification vote will be announced a week from today.

There are about 35,000 state workers who are members of the union. The contract needs to be approved by a majority of people voting on it.

The tentative agreement calls for wage increases that, when compounded, total 16.3 percent over the four-year term of the contract. The raises kick in every six months, beginning Jan. 1.
Workers will get two raises totaling 4 percent in calendar 2009, two raises totaling 4 percent in 2010, two raises totaling 6 percent in 2011 and a raise of 1.25 percent on Jan. 1, 2012. The contract expires June 30, 2012.

“The net increases are actually higher than those in the 2004-2008 agreement,” the AFSCME memo states.

The previous AFSCME contract, which was to expire June 30 but was extended as the negotiations continued, had two levels of raises, depending on the retirement formula to which an employee belonged. Those in the standard formula got 17 percent raises over four years.

Those in the alternative formula that covers high-risk jobs got 18.5 percent. However, the union members also had to make higher pension contributions that ate up a good portion of the increases.

The AFSCME memo did not say what the administration initially offered for pay raises, but referred to them alternately as “paltry,” “very meager” and “virtually nothing.”

Although Gov. Rod Blagojevich cut billions from the state budget and said further belt-tightening is necessary, an administration spokeswoman defended the raises it agreed to in the mediated contract talks.

“This is a four-year agreement,” Kelley Quinn said in an e-mail. “The first year increase is very modest and the rate of inflation must also be considered.”

The first raise of 1.5 percent doesn’t occur until halfway through the current budget year. Quinn said its cost is $16 million.

The major sticking point in contract negotiations this year was the administration’s demand that workers pay more for their health insurance, increases the union called “massive.”

Among those increases, according to the memo, was a $900-a-year hike in premiums for family coverage in state government’s HMO plan, a $300 deductible for prescription drugs and an $11 to $13 increase in prescription drug co-payments. AFSCME also said the administration was pushing a plan to have employees pay a certain percentage of health-care coverage costs, meaning as costs rose, so would the amount employees paid.

The proposed contract calls for $6 monthly increases in insurance premiums the first two years. It also provides for a $50 deductible for prescription drugs.

There are no increases in insurance premiums the last two years of the contract because the state will implement a wellness program designed to improve the health of workers before they suffer serious and costly illnesses. Both the state and union believe the program can help lower health-care coverage costs.

If it doesn’t work, the proposed contract allows the state to reopen talks in two years to discuss health insurance costs. If it does, the union will be allowed to bargain for higher wages.
Quinn said administration negotiators backed off the health insurance demands in the spirit of compromise.

“The union asked for an additional 2,500 positions, but that’s something the state could not afford to do,” Quinn said. “We had stronger demands, but needed to negotiate and get a contract in place. We believe this is a good contract that best serves the people of Illinois.”

The administration initially wanted AFSCME members to increase their pension contributions by 2 percent, but that demand was dropped. AFSCME said the state also wanted active workers to pay 3 percent of their salaries to cover the cost of retiree health insurance and wanted to end the practice of free retiree health insurance for people who left with 20 or more years on the job.
None of that is in the tentative agreement.